This "Chart Conversion" option is used only when you are saving charts into a Solar type chart file.
The default coordinate system that is selected in this drop-down list is applied whenever the chart data that is being imported does not have a coordinate system stored with it, or has a coordinate system that is not recognized in Solar Fire.
If the Force all converted charts to use these coordinates option is checked, then all imported charts are given the default coordinate system, regardless of what coordinate system may be stored in the imported chart.